Author plans to buy Synchrony (SYF) Feb 20 $85 puts at Monday's open on expectations that credit-card interest cap reforms will hit the lender.
Unpriced research observations (excluded from Calls and Returns):
SYF — SHORT Author argues Synchrony (SYF), a subprime-focused lender near 52-week highs (~$87) with 29% APR store cards, is vulnerable to the proposed 10% credit card interest rate cap. The causal mechanism is that the cap would gut SYF's high-margin lending model, and tangible book value around $38 suggests sharp downside if reforms advance. The planned trade is buying SYF Feb 20 $85 puts at Monday's open, reflecting a bearish view on the underlying; returns would track SYF share downside rather than put premium P&L. ambiguous_option_contract
SYF’s the prime target—a subprime-focused lender near 52-week highs (~$87) with 29% APR store cards. A 10% cap would gut their model, and with tangible book value around $38, expect a sharp downside move if reforms advance.